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i think we're in the process at the fdic with the other federal bank regulatory agencies of reviewing the comment letters, the numerous comment letters on both the redeposition proposal and its qualified residential mortgage exemption provisions. the issues you've raised whether or not we're -- the proposal appropriately excludes a large number of american families and households from homeownership is an issue that we are looking at very carefully and are mindful of the consequences to those families and individuals as well as our economy. >> and i just might add, as you know, the agencies went forward with a noticed of proposed rulemaking on this issue. when the fdic board approved that notice of proposed
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rulemaking, i commented at the time that we -- we'll have to strike a balance between trying to address the problems made evident in this crisis in terms of securitization and proper underwriting of mortgages with access to mortgage credit for credit-worthy borrowers. i think that is the challenge of this rule. i'd extend the period and we are comment seeking. >> we'll be looking at it with great interest. finally, mr. curry, i won't go through all the specifics of it but we have sent along with 10 of our colleagues and about a dozen house colleagues to the occ as well as to other agencies. the issue of alleged reports on mortgage modifications that suggests that the continued practice of robosigning continues to be a reality.
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and -- which is not acceptable. it is not acceptable under the law. it should not be acceptable for the regulatory agencies. we are being told -- we have been told by the regulatory agencies that they -- that that practice has ended. yet, there are reports that it has not. so my question -- the question that is put before all of you who have jurisdiction in this field is, will you disclose the results of the foreclosure reviews on a bank by bank basis including the letters of engagement for the independent consultants performing those reviews and the action plans by the mortgage servicers? i've got to believe -- i know that there's some claim of primetary realities. congressional services has said, in fact, it can be released in the public interest. there has to be some medium here by which you can assure those of us who are policymakers as well
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as the public that has ended? >> senator, i think the prorosigning market foreclosure issue is an extremely important one that affects both individuals, families, the banking industry and the overall mortgage finance industry. i think it's critically important that we work to restore credibility to that system. i think that the framework that is under the cease-and-desist orders that were issued by the occ and the other federal regulatory agencies is an important first step in trying to restore that credibility. i think as well the greater transparency that the agency's can show and how failures in that system are being corrected and individuals who have been harmed will find redress is critically important. and i think the agencies and the
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occ in particular, if i were confirmed, should work to be as transport as possible consistent with any governing supervisory or legal restriction. >> well, we'll look forward to that. thank you, mr. chairman. >> mr. chairman, thank you very much. mr. gruenberg, mr. curry, mr. woodall, thank you for your current and past public service. i thank you for your interest in providing even additional leadership. mr. woodall, you seem to have avoided any kind of serious conversation today. i only have to suggest to you that you must be a good person because your grandchildren are so well behaved. [laughter] >> congratulations. i want to focus my attention on community banks as has been at least in conversation today a topic of conversation. you indicate, mr. gruenberg, in your testimony primary federal regulator of the majority of our country's banks. fdic carries a particular
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responsibility for future of this crucial sector of our financial industry. i have genuine concern that community banks are on the verge of becoming a thing of the past. and in large part, i believe that because of the increasing regulatory burden that's being placed upon those banks. i don't know whether you would know a number, but i'd be interested in knowing what the percentage of regulatory cost is in comparison to assets or loans, deposits as compared to larger financial institutions. but in my view, and kansas has lots of community banks. they are the ones as you outlined in making loans to small business. in our case to farmers and ranchers, it's a different kind of environment. if you are asking -- seeking a loan at a community bank than you are someplace in a larger city with a larger financial institution, those personal relationships are important in rural states like mine. and i've had this conversation
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with every regulator that sat in this room and i would admit mr. gruenberg you have been in this room longer than i have. but i've had this conversation at every opportunity and i always get the same answer which is we take special consideration. we account for community banks. we understand their importance, but there's virtually no end to the concern or criticism raised by our commercial banks about the regulatory environment in which they're in and the amount of money which is being spent to comply with regulations, the additional staff that's necessary. and it would be one thing, i suppose, if community banks were not -- were not succeeding because they no longer served an economic purpose but that's not the case. in my view, the demise -- the fewer number of community banks is much more related to the environment in which they are finding themselves having to work. one of our larger banks in our
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state, their ceo told me earlier this year, the community banks for the first time in history are calling the large bank asking, are you at all interested in buying us? it's no longer any fun. the regulatory environment and costs that we encounter no longer make this a profitable venture. and so you see continued consolidation, the numbers are out there. we have fewer community banks as a result of some of the closures that's occurred. in large part it seems to me because they are consolidating with other banks in order to spread the regulatory costs among more assets and more loans. and so while i appreciate your reassurance, it's somewhat like you said, mr. gruenberg, about the too big to fail in response to mr. corker. we're waiting for the evidence that something is different in regard to those community banks. and so in particular, i want to -- and i certainly agree with you that the fdic insurance issues that you raise, i think
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are a positive development. but let me particularly raise with you the disparate treatment of capital standards between community banks and large financial institutions. the definition of well capitalized seems to have a different definition in regard to whether or not you're a large or small bank. and many of our community banks are being regulated in which they are required to have a much higher percentage of capital than our smaller banks -- i'm sorry, than our larger banks many of which those larger banks are under regulatory restrictions as a result of their financial condition. so my point is there's a double standard in my view between the capital requirements that small banks, community banks are required to have and that of larger financial institutions across the country including on wall street. and so my question is, will you
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continue to regulate higher capital levels for the so-called too small to save community banks and in a sense let wall street -- i don't want to say that. in a sense have a double standard, a disparate standard compared to wall street financial institutions? >> let me try to respond to that. it's my understanding that it's a matter of the rules that's applied today, they are the same across-the-board and it's fair to say that community banks as a general matter actually have higher capital than larger institutions. i think for my own perspective, one of the important authorities of the new law is to impose enhanced prudential requirements on our largest systematically significant institutions. precisely the point you make.
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they do derive an implicit benefit from their side and then to a certain extent their capital requirements have not fully reflected those benefits. and that approach is reflected in the basel 3 accord that senator shelby asked about earlier and in addition the provision to impose an effect of an additional surcharge on our largest institutions, that authorities under this dodd-frank act is a new international agreement to impose a particular on our banks. both to have them in account for their systemic risks that they pose and to bring about some greater leveling of the playing field with the smaller institutions. i agree with you that that playing has not been level.
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we should make efforts to try to bring greater balance to it. one of the things we can do under the new law which i think is important in addition to the capital and prudential requirements is to develop a capacity to place these large institutions into receivership because until you can do that, that also contributes to the funding advantage that they have. >> true. so on that end of it, i think the fdic carries a respond in regard to the large institutions. and as you noted and i noted earlier, we have a responsibility for the small institutions. >> well, there is a belief among bankers that there's an attitude at the fdic that small banks are more difficult to regulate. it takes more assets. the sense that you don't believe -- not you personally that the management does not thing the skills and capabilities are there. i assume in this setting you're going to tell me that's not the case. you about i would just reaffirm what i continually hear about a belief that the fdic has a -- i
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wouldn't say a policy but an approach that says it would be a lot easier -- a lot better for our economy if there were a lot fewer financial institutions. i will tell you for the economy of kansas, that would not be the case. >> senator, i appreciate you saying that. you're right, i would say to you, we spend -- my view, we don't have that attitude toward community banks. quite the contrary. we think they are really quite different in operation and a in a positive way from the large institutions in some sense their business model, if anything, has been validated during the course of its crisis. they stay close to their customers. they rely on core deposits. they generally are a source of stability during difficult times. and they serve a function in their communities that's really quite unique. and quite important for business
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rural areas, for smalltowns to that otherwise might not have access to financial services. we have a community made up of 14 community banks around the country. our board meets with those bankers three times a year. we hear directly from them what they and their colleagues are encountering in the field. we are endeavoring to stay close to this issue. i know we're less than perfect. but i do commit to you that this will be a er ma of continued attention for us. >> thank you mr. gruenberg. thank you, mr. chairman. >> mr. gruenberg and mr. curry, it seems to me that when producing a cost benefit analysis of each individual role your agency writes, you must also take the cross of the financial crisis and the harm infected on consumers, investors and the overall economy.
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how will you ensure that your agencies are taking into account the costs of this crisis when evaluating the costs and the benefits of the new rules? >> thank you, chairman johnson. i think it's critically important that all the agencies the fdic, the occ in particular, identify an appropriate way all the costs as well as the benefits for any proposed rulemaking. and as you identified, the cost of the crisis i think is an appropriate factor to be weighed in that crisis, the long-term costs especially. what's critical to any rulemaking is to have a process for encourage input from all affected sources and i think the fdic which i have been
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associated with for the last eight years, almost eight years, has been very effective in reaching out to interested parties to hear their views and to help assess the costs as well as the benefits of any rule that comes before the agency. >> mr. chairman, i would just add to that. when the fdic has a rulemaking to do, we put together an interdivisional team to oversee that process. and the way that works is that team comes up with a series of options for implementing regulation. and the whole purpose of the exercise is to evaluate the different options and in effect to weigh the balance between costs and effectiveness. and when we come out with a proposed rule, quite often in our notice of proposed rulemaking, not only do we put
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forward the proposal that's agreed to by that working group, but we will also ask for comment on the other options that are developed by that group in some sense to get a full airing of the different approaches for implementation to get the benefit of public comment for the series of options. and i would note that our inspector general undertook a review of three of our rulemakings pursuant to the dodd-frank act in effect to evaluate the economic analysis that we do. and i think it's fair to say that that report found our process pretty credible and balanced. so i think we do a pretty good job. i'm sure we could do better. >> mr. curry, you anticipate a good and effective partnership in the rulemaking process and our functions. >> i think there's an important
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opportunity to collaborate between the bank regulatory agencies and the cfpb. i think that issues and rule-makings really in this area tend to have elements of both disciplines at stake. i would use as an example the implications from a financial safety and soundness or risk management standpoint of the nontraditional mortgage loan products. they have both elements of consumer protection and also significant as we saw in the financial crisis -- a significant financial consequences to our banking system so that the extent to which the banking agencies and the occ, if i were to be confirmed, i think it would be beneficial as a two-way street for the occ to communicate to the cfpb the financial context
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in which a proposal would operate and also for the occ who will retain the ability to -- or the responsibility to supervise institutions under $10 billion, the opportunity to be aware of emerging or potential consumer protection issues. in summary, i think there really is a need for a close collaboration. and communication between the occ, the bank agencies and the cfpb. >> senator shelby? >> i'd like to pick up on senator corker's question about too big to fail and so forth. i would think that the ideal situation would be a message from the regulators that nobody is too big to fail. and that you do reckless things
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and you're the comptroller of currency and the fdic of the fed, big regulators here, that we're going to close you down, no matter who you are. of course, we're going to try to prevent as regulators into getting into this kind of trouble. not everything but a lot of the blame for the financial crisis -- a lot of it came from the regulators, right here. when i was chairman of this committee, i asked the question of the regulators, not you, but the others, the federal reserve chairman, the fdic chairman at that time, the comptroller, what are the conditions of the bank? we had a hearing on this. i hope that the chairman will continue this to hold a hearing specifically of the condition on the banking system and what was the answer here right here in this committee?
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banks are in good shape. like they weren't. they were undercapitalized. and often in a lot of instances not well managed, hands off instead of hands on. you do have the capacity now -- i think you could have had it then, more capacity. but i agree with mr. gruenberg here that you got to have the will and you got to send a message. part of it is a message but they won't leave you. what's the old story you've heard all your life. if you tell somebody you're going to shoot them and if they cross the line and you don't shoot them, they've got you, you know? the question is, what are you as regulators are going to do your job? you got the capacity but you have the will. i hope you do. and i think that the regulatory environment is tough.
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that the senator into kansas got into that. i've never worried about, maybe i should, a lot of the small banks bringing systemic risk into these banks, some of the large institutions have and will again. i do worry about europe. as the chairman said, the acting chairman, a lot of our european banks are undercapitalized, much more so than us. basel iii which we've all worked on, i think you've got the framework and the question is, will you, as regulators implement basel iii capital? and my question to both of you, if a foreign bank -- let's say it's a german bank or a british ba bank, doing business in this country, if they're undercapitalized, do you have any power over them at all as to
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their capital standards doing business in this country because they could cause systemic risk here. marty? >> senator, to the extent the foreign bank has a subsidiary here subject to our regulatory authorities, the answer to that is yes. >> and what does that mean? does that mean you have some capacity to deal with their capital, their overall capital, because their overall capital is what matters. >> to the extent we're dealing with their foreign capitalization of their foreign operations, that is something we do not have direct authority over. and that's, frankly, why these international agreements are very important. >> uh-huh. >> not only to reach them but to monitor compliance with them. and we really need to develop that capacity to monitor not only our own compliance but what the major foreign institutions are doing because at the end of the day it does all come
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together and risk there is risk here as well. >> mr. curry, do you have any thoughts on that because some of those big foreign banks are doing business here. and some of them, as you know, had some shaky foundations just a few years ago. >> i would have to agree with chairman gruenberg with respect to the occ they would have to be a supervised entity by the occ to take action. i would comment that i agree with you that you cannot ledge laylate fortitude and it's something you have to bring to the table. i also believe it's appropriate for all the banking agencies to look as the vice chairman mentioned with the material loss reviews how we could have done better and to learn from the lessons of this recent crisis. >> mr. woodall, i know you've
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gotten by here today, but i think we basically believe that you're well qualified for this position. and i do have a well-behaved and nice-looking family back there. [laughter] >> but this position is unique here as you pointed out and we know. the position you've been nominated to serve on. you'll be the first person to hold the insurance seat on the financial stability oversight council. and how you carry out your duties will set important precedent for the role of this position that we'll have on the future on the council. what contributions do you see -- and i know you don't see every crisis 'cause they haven't emerged yet, in this position make, to improve the effectiveness of the council from the insurance -- on the perspective of insurance companies, you know? and you will be as you well
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know, the company of some very powerful people and also the chairman of the federal reserve and others, the treasury, how do you see your position there? i don't believe you're going to be a shrinking violet. you didn't take that position for that. >> no, i don't tend to be a shrinking violet. >> so perceive you as a shrinking violet. you have four sons behind you. [laughter] >> it's not just the insurance industry, or just the regulators or the international part, it's all of that. >> and a lot of financial products through the insurance company just like banks in a different way. >> that's right. as i said those products sometimes when they veer away from what the normal model is, and take on more risk, then they could, you know, some way have
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systemic risk involved in, but that's what we have to look at. we have to look at it from a company by company aspect. but the fact that the insurance industry, if such a large part of financial services, all of it before fsoc, what is the total picture of financial services? and this is a new creation. and i am an independent voice. i won't be speaking for the administration or for the industry or for the state regulators. i have to take all of that into account along with what's happening at the international level. >> but there are some big insurance companies that could cause systemic risk to this picture. i hope they don't ever but, you know, they're such a size they could. but they, too, have got to have standards of capital and working
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capital and everything that goes with it, have they not? >> well, you've been talking about basel. >> right. >> well, on the insurance side -- >> and prevent another aig. we don't want to go down that road. >> well, and i think i've tried to address that. >> you did. >> before the history showed us when the insurance company, and that one in particular, went beyond what the traditional model was, they got us in trouble. and you have to look under the hood and make sure there aren't any regulatory gaps in there that would bring that. that's why it was set up to help identify any sort of regulatory gap and to help develop within the federal government positions both nationally and internationally on international issues, insurance issues. >> well, thank you. thank you, mr. chairman. >> i think the -- i thank the witnesses for your testimony and for serving your country.
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i ask you to send written submissions for july 29th. any requests that the witnesses submit your answers to us by close of business by tuesday, august 2, so that we can move your nominations forward as quickly as possible. this hearing is adjourned. [inaudible conversations] >> c-span3 has coverage of two house hearings today.
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>> like any business, it's subject to marketplace trends, unfortunately, we've seen a significant long-term decline in our most profitable product category, first class mail which accounts for approximately 50% of our revenue. >> that was postmaster general in may testifying on the financial stability of the u.s. mail. this week he announced plans to close more than 3600 branches across the country. learn more about post office operations online with the c-span video library. search, watch, clip and share. it's what you want, when you want.
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>> the u.s. senate begins their day in just a moment, u.s. senators will begin with general speeches and later they may consider the nomination of fbi director robert mueller to another two years. he was originally confirmed unanimously back in 2001. his term is about to expire. the senate may also consider a deficit reduction plan offered by democratic leader harry reid raising the debt ceiling through the elections in 2012 and it reportedly cuts the deficit by nearly $3 trillion over 10 years. it doesn't include tax or revenue increases. and now to live coverage of the u.s. senate. -is there-is there eternal spirit, your goodness endures continually. save us by your name and vindicate us by your strength. bend your ears to the words of
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our prayer, and do not hide from our supplication. as our lawmakers face difficulties that test their power to the limit, shield them from cynicism and faintheartedness. may they not become weary in doing your will, knowing that they will reap your bountiful harvest if they faint not. lord, as our nation faces the potentially catastrophic, inspire our lawmakers to seek your counsel, which will stand forever.
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illumine their pathway that they may not fail. we pray in your merciful name. amen. the presiding officer: please join me in reciting the pledge of allegiance. i pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all. the presiding officer: the clerk will read a communication to the senate. the clerk: washington, d.c, july 27, 2011. to the senate: under the provisions of rule 1, paragraph 3, of the standing rules of the senate, i hereby appoint the honorable kirsten e. gillibrand, a senator from the state of new york, to perform the duties of the chair. signed: daniel k. inouye,
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president pro tempore. mr. reid: madam president? the presiding officer: the majority leader. mr. reid: following leader remarks, the senate will be in a period of morning business for one hour, with republicans controlling the first half and the majority controlling the final half. i'm told there's a bill, s. 1420, due for its second reading. the presiding officer: the clerk will read the title of the bill for the second time. the clerk: s. 1420, a bill to require that united states government prioritize all obligations on the debt held by the public, social security benefits, and military pay in the event that the debt limit is read and for other purposes. mr. reid: madam president, i would object to any further proceedings with respect to this legislation at this time. the presiding officer: objection is heard. mr. reid: madam president, today our republican colleagues in the house planned to vote on a bill to lift the debt ceiling
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a few months before plunging this nation's economy back into a state of unsent. what i mean by that is under their legislation, which would extend the debt ceiling for just a few months in the latest report because the numbers they have come up with are all wrong, we would come back in september, if in fact we ever left here, and we would be debating the debt ceiling all over again. what a way to proceeds. it is just unbelievable they would come up with such a program. last night speaker boehner pushed back that vote because his legislation didn't even have the support of republicans in his own chamber. a group of the republicans, the club for growth, and many other organizations have said they simply don't like his legislation. but pushing back the vote by a day or rewriting parts of it won't solve the underlying problem: a short-term solution is not an adequate solution for our economy. our country, ow economy, and the world demands more.
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why do i say "the world?" because our economy is the most robust, strongest economy in the history of the world. for us to fail to pay our debt would throw the world economy into a tailspin. even if the speaker could get his legislation through the house of representatives, i can assure everyone, madam president, that it wouldn't pass the senate and certainly, if by some strange phenomenon it passed, the president wouldn't sign it. we don't have to worry about that. there'll be no veto. this legislation is so weak that it won't get out of this chaivmenchamber. rather than lifting what economists call "the fog of default," this republican plan would usher in an rare o an erad economic weather that would last for years. a few weeks ago, speaker boehner said it was a bad idea to push the problem down the road for a
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few weeks or a few months. back then he was not interested in a short-term solution. back then he was right. this is why: economists, market analysts and rating agencies said the world economy simply cannot bear this kind of uncertainty any longer. they've said a short frm solution to the intending default would still result in the loss of our triple-a rating, whicwhich has kept interest rats low for years. so, madam president, i trust that speaker boehner and other reasonable republicans understand the seriousness of a default crisis. here is what the speaker said very, very recently: "that would be a financial disaster not only for our country but for the worldwide economy. you can't create jobs if you default on the federal debt." end of quote. but a short-term fix doesn't get the job done. it would cause many of the same calamitous results as a
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technical default, including rising interest rates. it would slings raise every person's taxes in our country -- it would essentially raise every person's taxes in our country. americans would pay more for car loans, student loans and everything else. it wouldn't just be costly for consumers. it would also cost the federal government more and actually increase our deficits and debt, and very quickly. a less than 1% increase in interest rates, which economists have predict fundamental our rate something downgraded, would cost us $100 billion every year. in a decade it would cost this country as much tax revenue as speaker boehner's proposal would cut from the deficit. republicans would like the american public to believe democrats in congress and the white house are insisting on a
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long-term deal for political reasons. they say democrats want to push this off until after the presidential election. that's not true. it is not democrats who've asked for a long-term solution. it's the economy. the economy has demanded it. if republicans in congress are willing to risk our economy by playing politics in july, why wouldn't they do the same in september, october, november, under his proposal, speaker boehner's proposal would run out of money? that's why every economist, every market analyst, every rating agency hanes sissed any legislation to avert a default on the nation's debt must take us through the end of 201. the senate is considering a measure that would avert default and cut $2.7 trillion from the deficit. it is a reasonable measure. the republicans have supported every one of its cuts in the past and it should be able to pass both houses of congress
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with bipartisan support. i have heard a number of my friends unlet other side of the aisle come here and say, they're talking about an overseas contingency fund. the congressional budget office, the nonpartisan watchdog of congress, has decided that that is worth $1 trillion, just what we put in our bill. the office of management budget and it is worth $1 trillion. it gives -- the legislation that we're projecting gives each side something it wants. it protects social security and medicare without raising a single penney of revenue and most importantly it is a long-term strategy to safeguard the economy and give the markets when they need. it would not put us through all this again in a few months, and with even less certainty of achieving compromise than now. british prime minister david lloyd once says, "there's nothing more dangerous than to
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leap a chasm in two jumps." that's really true. congress has a duty to do what it takes to avert a default in one swift leap. it will take political courage. i urge all my friends, democrats and republicans, to join hands. we can take courage from one another and make that leap together. because if we don't clear this chasm, our nation's economy will go over the edge with us. madam president, i would note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:
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mr. mcconnell: madam president? the presiding officer: the republican leader. mr. mcconnell: i request the quorum call be dispensed with. the presiding officer: without objection. mr. mcconnell: yesterday afternoon the white house issue add statement of administration -- issued a statement of administration policy which said that when the legislation speaker boehner is now revising reaches the president's desk, unnamed senior advisors will recommend that the president veto t i have a question for those senior advisors: what about this legislation is so offensive that you'd rather see the nation default on its obleses than have the sign president it into law? from what i can tell, the only thing in this bill that the president ha hasn't already expressed his support for, either publicly or privately, is that it doesn't get him through his election without having to engage in another national
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discussion about the debt crisis that's brought us to this point. so i would ask these senior advisors whether that's a position they want to put the president in. do they really intend to suggest that he veto the nation into default for political reasons? that's how i read the threat. and i think that's how the rest of the country would read it as well. this morning i'd like to reiterate my very strong support for speaker boehner, the house republican leadership and this plan to prevent default and reduce washington spending. i also want to commend the speaker for his efforts and for his determination. this hasn't been an easy process, but i hope through it all the nation sees how hard the speaker has worked to ensure our nation avoids calamity while safeguarding the american dream. the nation's had a chance to see the speaker at his best over the past few days. unlike the president, he not only put forward actual legislation to prevent this
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crisis, he's keeping his promise to cut spending more than any increase in the debt limit with no tax hikes. and what about the president's plan? when i asked the president's plan, his aides point to a speech and a veto threat. madam president, with all due respect, congress can't vote on a speech, and a veto threat won't prevent default. the fact is republicans have offered the only proposal at this point that attempts to get at the root of the problem and which actually has a chance of getting to the president's desk. that's why we'll continue to press for the legislation speaker boehner has proposed and that's why we'll fight against anything that pretoepbdz solve the problem -- pretends to solve the problem but doesn't, including a bill from senate democrats that proposes the largest debt limit increase in history while falling $500 billion short on the cuts it claims to provide. madam president, this crisis our
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nation faces at this moment has a very simple cause, easily understood. washington spends a lot more money every year than it takes in. do that every year and the debt piles up. and now we've reached the point where our deficits and debt are so large they're suffocating job growth, threatening the wider economy and imperilling entitlements. it took more than two centuries -- two centuries -- for washington to amass a debt of $10.6 trillion. but just two and a half years after president obama swore the oath of office, it's higher than that by more than a third. and based on the president's actual policies, the situation is expected to get much worse. in just five years' time under president obama's budget plan, the federal government will spend almost as much money just to cover the interest on its debts as it will on national defense. and over the next ten years the president's policies will add
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more than $9 trillion to the debt. this is why s&p revised its long-term credit outlook for the u.s., not because we haven't authorized the president to spend more money, but because he's asking for too much of it. and yet incredibly, the president's budget could do nothing to reverse this trend. so he can claim to be interested in a solution, but what he's actually put on paper makes the problem worse. right now the president is asking congress to rate the debt ceiling by more than it's ever been raised before in our history, even as the nation is teetering on the edge of a crisis caused by that very debt. let me repeat, our nation is facing a crisis because of the size of our debt, and the president of the united states, the man that americans elect to be the steward of our economy, is threatening to veto any bill that doesn't add more than $2 trillion to the debt ceiling, the largest increase in history. the president's not taken a
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stand on cuts. he's not taking a stand on reform to entitlements. he's not insisting on reforms. forget all of that. what he wants more than anything else is more room under the debt ceiling to get him through the election. he said that is his bottom line. so i remain as committed as ever to resolving this crisis in a way that will allow us to avoid default without raising taxes and to cut spending without budget gimmicks. there's only one option that does that, and that's the one speaker boehner has proposed and that is being improved as we speak. madam president, i yield the floor. the presiding officer: under the previous order, the leadership time is reserved. under the previous order, the senate will be in a period of morning business for one hour with senators permitted to speak therein for up to ten minutes each, with the time equally divided and controlled between the two leaders or their designees, with the republicans controlling the first half and the majority controlling the second half.
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a senator: madam president? the presiding officer: the senator from south dakota. mr. thune: madam president, yesterday i came down to the floor to talk about where we'd been, where we are and where we're going, and to discuss how we're going to get out of this mess. and i pointed out the president's disappointing record when it comes to these debt issues. the president originally requested a clean debt ceiling increase that didn't have any spending reductions attached to it. he then submitted a budget that failed to ever balance, and this budget didn't include the recommendations from the simpson-bowles commission that he had appointed to come up with some suggestions about how to put our country on a more sustainable fiscal path. according to the congressional budget office, his budget didn't even meet his metric of primary balance, which is balancing the budget not including interest costs. after realizing that house republicans were the only ones with a plan to balance our budget and pay down the debt,
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president obama decided to give a speech. of course it was just a speech. it did not include numbers. he didn't resubmit his budget to congress despite requests to do so. he just gave a speech. and as they say, madam president, talk is cheap. we need action. the only action he's promised, though, is that he will veto plans that would do something to address our debt and deficit problem. earlier this month the administration issued a veto threat for the cut, cap, and balance bill. this was a reasonable proposal that immediately cut spending, put a cap on spending and would have raised the debt limit after a balanced budget amendment was approved by the congress. in fact, this was so reasonable that according to a cnn poll, 66% of the people in this country supported this plan. this bill garnered the support of 234 members of the house of representatives, including 5
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democrats. but senate democrats voted to table the bill after this veto threat was issued by the president. so, speaker boehner in the house of representatives unveiled yet another plan. it certainly isn't perfect but it begins to deal with our spending problem while also increasing the debt limit to provide a period of time for congress to pass more substantial budget savings. unfortunately, the administration issued a veto threat for this bill. their reasoning? it doesn't extend the debt limit past the election. now, it doesn't take a genius to figure out why. it's not because the markets require a longer-term increase. they don't. it's not because congress generally approves long-term increases in the debt limit. we don't. it's not because a long-term increase would force us to cut more spending. it wouldn't. it's because the president has to face reelection next year. that's it. nothing more, nothing less.
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it's a political consideration, not an economic one. so after months of fearmongering about the risk of not raising our debt limit, the president would actually veto a bill because it casts him in a bad political light. madam president, this is unacceptable. tomorrow i am hopeful that the house of representatives will pass the boehner bill, and i'm hopeful that as soon as we receive it here in the united states senate, we'll take it up, pass it, and send it to the president for his signature. we need to do it not just for the debt limit increase, which we do, but we also need to do it to start cutting spending and creating a process to reform entitlement programs. already our economy is feeling the impact of these debts and deficits. we know from the reinhart and rogoff study that our economy is already growing at one percentage point less than it should be because of our debt. this is kofgs us about a -- costing us about a million jobs
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every single year. if we don't take action to cut spending we know what our future holds: downgrades, interest rate increases, austerity programs filled with tax hikes and tkra cone kwrapbl spending cuts -- draconian spending cuts. looking at europe, ireland pays 12.9% interest on three-year bonds. portugal pays 19.4%. greece pays an astounding 28.9%. these rates would truly bankrupt our country in short order. unfortunately, as former bush economic advisor and federal reserve board governors member larry lindsey pointed out in a "wall street journal" op-ed recently and reiterated yesterday at a finance committee hearing, even a normalizeation of interest rates in the united states at an historical average for the past 20 years would add $4.9 trillion to our projected debt over the next ten years. madam president, we can't afford the spending that we have
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now, let alone this additional interest. we need to start cutting spending now. both the cut, cap, and balance plan and the boehner plan would do this. we also need to create a process to reform entitlements. the cut, cap, and balance plan does this by capping spending. and the boehner plan does this through a new joint committee that has a firm deadline for congressional action yet this year. i wish i could say, madam president, there was a plan by the president that does this. there isn't. and that's why we here in the united states senate and the house of representatives are going to have to take the leadership in this debate. the president obviously has decided that this is more about politics. and unfortunately has not stepped up and provided the leadership that's necessary to get our country back on a sustainable fiscal path. as a consequence, we are where we are facing a few days from now a deadline where we will have to increase the borrowing authority of this country. what i would submit to my
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colleagues, madam president, is that the issue and the challenge and the problem in front of us is not the debt limit. it is the debt. if we don't do something about this debt, we are going to bankrupt this country. we are going to see the kinds of interest rates that they're seeing in europe. we're going to see anemic economic growth in this country and it's going to be very, very difficult to get people back to work. so cutting spending, getting our fiscal house in order, making government smaller, not larger, making the government economy smaller and the private economy larger is the way that we need to get this country back on track. but it starts by having a plan that puts our fiscal house in order. and so we in the next few days, we're going to have a chance to vote yet again on a plan put forward by the house of representatives because the president has failed to put forward a plan. and i hope, madam president, that our colleagues here in the united states senate will do the right thing for this country and start to get us on that pathway
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that will enable us to get past the short-term challenges that we face, get us an opportunity to vote on a balanced budget amendment which i think is desperately needed in this country, that would put the kind of fiscal discipline in place for the long term so that we aren't having these year-over-year $1.5 trillion deficits that continue to accumulate more and more debt and put this country at greater, greater risk in the future generations in greater jeopardy. i would hope my colleagues will support a responsible plan that actually does cut spending, actually does address the issue of entitlement reform, does it without raising taxes and make sure that come next tuesday we've taken the action that's necessary to protect our economy, shield it from any adverse impacts that could occur as a result of us not raising our debt limit but do it in a way that addresses the fundamental issue here which is not the debt limit, but the debt. madam president, i yield the
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floor. a senator: madam president stph-p. the presiding officer: the senator from georgia. mr. isakson: madam president, i associate myself with the remarks of the senator from south dakota. before coming to the floor this morning, i returned two phone calls that i got yesterday out of 2,000 phone calls that came to the office. i picked those two because they remember both people that i have known for a long time but haven't talked to in a long time and have never called me in my capacity as a senator. both of them are business people. both of them are neighbors. and both of them had the same message. the uncertainty that congress and this administration are now causing in terms of our inability to meet the day of reckoning next tuesday when we must do something is beginning to impact their business, their philosophy, their investment and their country. what we are doing as we dillydally around almost, putting off a final decision, agreeing not to agree on anything is we're making things worse. and i think the reports in a couple months will show economic activity in july will show you america is slowing down.
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economic activity is slowing down, and it's because congress and this president cannot get their act together. history and facts are stubborn things, and i want to go over a two-year history of this debt ceiling crisis because for two years we've known it was coming. for two years we have talked about it. in fact, a little over 18 months ago on the floor of this senate, republicans and democrats passed a deficit commission amendment which made it successfully through congress, was signed by the president, and that deficit commission was created. it was charged with coming up with a solution for our rising spending problems, reduction of our deficit and our debt over time, better management of our fiscal policy, and getting congress's act together where it could vote up or down on a proposal. that became known as the simpson-bowles proposal. it cut $4 trillion in spending over a decade. it reformed our tax policy. it weeded out a lot of bad things that had been there for a long time. what happened when it came out in december? the president rejected it out of
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hand. i'm not being partisan here because a bipartisan group of people offered that amendment. i was one of the five republicans that voted for it on the floor. i thought it was a conscientious way to begin to address the debt and the deficit and the problem that we face. for some reason unbeknownst to me in december of last year the president of the united states rejected it out of hand. all he had to do was send it to the senate for an up-or-down vote like the amendment called for, and we would have at least begun the process of dealing with our debt and our deficit. instead he rejected it out of hand. in the months preceding this debate today and preceding this coming tuesday when we do run up against the debt ceiling, we've had other things come to the floor of the senate or the house that have been reap skwrebgted out of hand. rejected out of hand. the k cut, cap, and balance legislation which i voted for last week, or voted not to table -- the leader decided to table it and not discuss it -- was a conscientious way to deal with our debt and deficit over time. it was a discipline process that said we need to make cuts now and begin the process, $51
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billion. we need to cap our spending in the few taoufr based on historical spending averages and we ought to give the american people a chance to say does america need a balanced budget or not. instead of dealing with that legislation the senate tabled it. once again when we had a chance to say just say yes to solving our problem, we said no. last night speakerer boehner's bill was pulled off because of a revenue estimate produced by c.b.o. i hope that will get worked out and i hope that will pass the house and come back to the senate. it's about time for us to say just say yes to something instead of just saying no. i want to talk about the consequences of just saying no for a second. the longer we say no, the longer we send uncertainty to the world markets and our own market the worse our problem is going to be. our tax system is based on americans being prosperous. as america prospers, as we have better economic activity, our revenues go up not because we raise taxes, because we've raved
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expectations. -- we've raised expectations. we are now lowering expectations in america. the two business people i talked to this morning said they don't know what to do and quite frankly i didn't know what to advise them. i ran a company for 22 years and i know the worst thing about running a business is to have uncertainty in terms of which way you're going. it's my sincere hope that everybody will come together and realize no is not an option. we need to say yes if we -- if the president has a plan, bring it. if the house passes their plan, let us vote for it on the floor. but let's move forward because the price and the cost of uncertainty
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they're is going to have to try it replace it with a plan that washington mandates. that's concern to a lot of americans. this may be very bad news for the patient and is really bad news for taxpayers. experts predict that the annual cost to provide government insurance subsidies could cost up to nine times more than what the white house originally claimed. now, if that isn't proof enough that the health care law is the wrong prescription to help america's job creators offer coverage to their workers, let's take a look at the things that have come out in the last week. just in past week, july 25, the national federation of independent businesses, represents small businesses all around the country, they reminded an aston -- they released an astonishing new report. they have surveyed 750 small businesses. these are small businesses less than 50 employees. the survey asked these small businesses if they planned to
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drop health insurance coverage. should their employees become eligible for this government subdisubsubsidy to buy health insurance in this exchange. more thank a quarter of the small business who offer coverage today -- over a quarter of small businesses that offer coverage today said that they were very likely to drop coverage, very likely to drop coverage. another 31% said they're somewhat likely to drop coverage. they need to look into it and find the specifics. when you take a lack and add the ones who are likely and somewhat likely to drop coverage, you are looking at over half the small businesses in this country considering dropping insurance coverage, effectively dumping their employees into the government-run exchanges. wcialg the small businesses group in the survey and the response from these small businesses, it prompted "the wall street journal" to print an editorial highlighting this data, and it's titled "the flight to the exchanges."
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and i read this and say, gee, i couldn't have said it better myself. the president's health care law wraps businesses in repeals of bureaucratic red tape and uncertainty and adding insult to injury, on monday, july 11, of this year, the department of health and human services released yet another proposed regulation mandate the by the health care law. the obama administration issued its proposal. it is called "the insurance exchange regulation." so what the rules do is they give the states the specific framework that they must use to set up a program or an exchange with this washington-approved and mandated insurance. so here we go again. another example of where this administration takes roughly 30 pages of the health care law and then turns it into 344 340 pages and regulations.
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the secretary of health and human services is trying to sell this as competition. nothing could be further from the truth. how flexibility can a 347-page washington rule be when it's a rule that contains the word "must" 580 times. and it includes the word "require" 811 times. how flexible can that washington rule actually be? well, after examining all the rules, musts and requires, one thing is very clear. this administration is paying lip service to state flexibility while their policy is promoting a washington-mandated, washington-dictated, washington-enforced approach. this regulation details vea complex and confusing process that states are going to have to follow. the states have to follow these confusing rules in an effort to prove to the department of health and human services that they meet its washington mangeds
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to recipient and to run the -- its washington mandates to set up and run the insurance exchanges. they have very little time to do t this administration creates onerous new mandates and then it fails to give states ample time to meet their overwhelming set of requirements. so let's put this into context for the state states. the comefntses of the proposed rules are due this september, september 28. typically it can take the department of health and human service six voontsz mofntses to review these comments about the rules and issue a final rule. that means it would likely see a final rule in march of 2012. now, remember, there are significant details missing from these exchange regulations. this regulation is only part of the details that states need to review before they can decide whether or not to run a health insurance exchange on their own or let the federal government do it. so the administration still has yet to release rules explaining
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the health care law's essential health benefits package, the eligibility to participate in the exchanges, still waiting for the rules on quality standards for the exchanges, and waiting for a release of the rules explaining quality standards for the participating insurance plans. those details may not come out until october or november of this year. this means that states still do not know what the minimum set -- the minimum set of health service individuals and small businesses and insurances will have to offer in the exchange. pending missing details and further rules expected to come from the administration this fall, final rules -- final rules may be in place finally in may or june of 2012. states would then have to be prepared to submit their plan june of 2012 to health and human services to be certified. so what happens if the rules aren't out by then?
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you know, many state legislatures end their sessions by june. so making it very difficult for them to comply with these tight time lines. it's almost impossible. it seems to me that this administration will have had two years to post their final regulations while the states may have only two months to comply. what happens if a state isn't ready? well, they say, have no fear, washington is there to help. that's what they say. if the department of health and human services, they say that the state's insurance exchange, if it is not in compliance, then washington will swoop in and recipient its own program. -- and set up its own program. this is often called the federal fall back or federally facilitated exchange. big fancy words for washington bureaucrats telling states what they have to do. the irony of all of this madam president, is that the administration's rules offer very few details explaining what this federal fallback exchange will look like. so the states don't even though
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what happens if the federal fallback comes into play. is the department of health and hule services creating a stealth backdoor federal exchange so if the state doesn't have adequate time to meet all the owrptional program requirements and the burdensome review process, well, it sound like then the obama administration will take control of the states. so why should a state like utah, elogy, that has created a specially designed insurance marketplace be forced to comply with onerous and costly requirements of this rule? and if they're not willing to comply, they will face the consequences that washington will make the final decisions. states should be encouraged to create innovative solutions that meet the unique needs of their constituents. not forced to follow a one-size-fits-all laundry list of washington mandates. that's why, madam president, i return to the floor today it is a a physician who has practiced medicine for a long time, with a
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doctor's second opinion to tell you that i believe this health care law is one that is bad for patients, it's bad for proirks the nurses and the doctors who take care of those patients, and it is bad for taxpayers. and that's why i believe it is important that we repeal and replace this health care law. thank you very much, madam president. i yield the floor. ms. mikulski: madam president? the presiding officer: the senator from maryland. ms. mikulski: good morning, madam president. how much time have i been allowed for morning business? the presiding officer: ten minutes. ms. mikulski: i thank the presiding officer. madam president, i come to the floor today with a great sense of urgency. we are less than one week away from reaching our debt limit. if we fail and we fail terek the united states of america will be irrevocably fractured. we aren't at an impasse.
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we're at the edge of a cliff. unless congress acts, we're going to go over t and what will be the consequences of it? if we do not meet our obligations to pay our debts, it will result in a default and default will result in enormous increase in interest rates. for all of america that's so worried about tax increases, i got to send a real red alert when interest rates go sky-high because of our failure to act. it will be the biggest tax on america that we could have, and it will be a tax at the kitchen table. it means if you have a variable rate mortgage, it will skyrocket. if you have a student loan, that interest is going to increase. and if you have a car loan, forget it, the payments are going to be enormous. so we need to face what this
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means. raising the debt limit, we need to prevent the default so that our bond rating is not lowered. now, i've never been big on talking about bond ratings, but this is a crucial one. we now have a aaa bond rating, so what does that mean? it means when they buy our treasury bills or other government secured benefits, but particularly our t-bills, it is as good as gold. now if we're downgraded, we could just be a tin horn, tin cup nation. this is not the united states of america. this is not what people fought and died for. when people say they represent a party that wants to defend the constitution, we all have to defend the constitution. and right now defending the constitution and defending america is to lift our debt ceiling and get work, the hard
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work of, number one, dealing with our debt, but also dealing with another issue of job growth. so we've got to get to work. instead we are busy at work playing the blame game. squabble is not a solution. but i believe we democrats do have a solution, and i think the solution does lie in the reid proposal. the reid proposal that the senator from nevada, the majority leader, has offered is substantive, it's real, and it's achievable. madam president, i was on tv yesterday and they said oerbls, you're a -- they said oh, you're a liberal democrat. i don't know if i'm a liberal, i don't know if i'm a conservative, but i'm a diner democrat. i think about the people. i think about the ordinary
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people and i think about their day-to-day needs. and when people talk about what kind of solutions they mean and they want everything on the table, what i want on the table is the things that affect the kitchen table. and that's why i support the reid proposal. it is an achievable framework for avoiding default now and downgrade of our bond rating now. what does it do? it has three important elements. one, timing to, take us through 2012. it's not about the next election. it's showing that we are serious and we're substantive. second, it has really important content, where we really do cut federal spending. and it's observable and it's quantifiable and it's verifiable. and, number three, it gives us a path forward to deal with the important issues of entitlement and revenue reform.
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wow, so why can't they take it? i am really puzzled about why they can't take it. it's 2012? okay. who knows who's going to be in control of either the white house or the congress then. but it can't be about us. it's not about me. it's about we. we, the people. second, let's go to the content. there are substantial cuts there in discretionary spending. defense spending that does not affect readiness or military health care. and it got rid of earmarks. it got rid of earmarks a long time ago. and there are actually cuts that the house voted for in the ryan budget. so a few weeks ago they said yes to the cuts. but when we say yes to the cuts, they say no to the proposal. i don't get it. but most of all, it's not
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whether i get it. it's that we don't -- we have to make sure that we get a solution. what i think is important about the reid proposal is it's $2.7 trillion in cuts. i understand c.b.o. has scored it, and they say it's $2.2 trillion. $2.2 trillion, $2.7 trillion, that's real money. that is real money. and it shows that we're serious. it also provides this important path forward called a joint committee. now, it is not a commission where it's going to be outsiders who are experts from think tank environments and hoo-haw. what it is is members of congress, both sides of the aisle, both sides of the dome. let's get it together with them and then let's have this committee where we then move
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forward on the reform of revenue as well as looking at entitlement reform. i want to be clear that when, if in fact the horror of all horrors become when we fracture the standing of the united states of america not only in the financial markets, but in the standing of the worblgsd it will have very serious consequences. first of all, to benefits. you know, the president is going to have to pay the bills based on whatever money's coming in. he won't be able to borrow. america won't be able to borrow. so our t-bill will not have the same value that it once did. he's going to have to pay our bills. so what are the benefits? one is paychecks. the first paycheck that he's going to need is the paycheck to our troops. he's got to make sure that if they're fighting to defend america while we're squabbling around and screwing around,
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we're going to pay our troops. my god, did it over occur to anyone that our troops wouldn't get paid? yeah, it's going to be tight. so we pay the troops. we're going to certainly pay our veterans benefits. they might not be in the same amount the first month, but we'll kind of squeak through. it will be social security. well, maybe the checks will go out, but maybe it all would be in half the amount. but the social security offices will be closed. so benefits will have a direct impact. where is he going to slow down the trickle of money to state and local governments? so what does that mean? community development block grant money, education and so on, that's going to really cause enormous layoffs at the state and local level of public employees, but also the contractors. that asphalt contractor, that
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person who handles the office machinery and so on, all that small business they love to romanticize over. minority contractors are going to have a big impact. then it takes us to the government will definitely slow down or not pay at all contractors, whether it's the big defense guys that employ thousands and thousands of people or is it not going to pay the small to medium-size business like in my own state that does information technology? now, we are about to destroy the reputation and solvency of the united states of america. we are about to destroy the reputation and solvency of the united states of america not only for one day, but for a decade and maybe the rest of the century. and this is not being done by an outside power. we're spending $700 billion on defense, and we're destroying ourselves by a self-inflicted
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wound because of political dysfunction, political rigidity and political ideology. what the heck is this? and i could even use more intense language. what we are about to do -- we cannot allow this to happen. so i say to my colleagues, look, one of my colleagues said to me yesterday, senator mikulski, what would it take to get you to the table? i said give me a plan and 30 republican names behind it. i'll see if i can support the plan and get 30 others. so, madam president, i know my time's up, but i don't want the time to be up on america. let's come together. let's stop being democrats. let's stop being republicans. let's really say call us what we should be called: an american. and what do americans do? when the times get -- when the times are tough, the tough get
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going. let's get going. let's make the tough decisions. let's put politics aside, put america number one and get us back on track. madam president, i yield the floor. mr. schumer: madam president? the presiding officer: the senator from new york. mr. schumer: first i want to thank my good friend and colleague from maryland for her great words. she comes from the heart of maryland and the heart of america. very few people i have met in politics in my many years in this endeavor have an understanding of how average people feel and think and tick than the great senator from the state of maryland. and i want to thank her for her outstanding remarks. if this body on both sides of the aisle would listen to her and her commonsense intelligence, we'd be in a lot better shape than we are now. so i thank my colleague from the great state of maryland, the senior senator. now, madam president, i rise today to discuss the deadlock we've reached in the debate over raising the nation's debt
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ceiling. two nights ago the president spoke and put the current stalemate in the context it belongs. the result of a small block within the -- small bloc within the house republicans that refuses to compromise even one inch. it is on their shoulders. we have perhaps 100 republicans at the extreme right who seem to be leading the congress, the nation over a cliff. they don't even care about the idea that we might default. it's appalling. and yet, they seem to be calling the shots. for the last few weeks the president has met over and over again with house republicans, trying to meet them halfway, and in some instances more than halfway. he's offered to cut record amounts from our debt and make cuts in programs that would be extremely painful to our side of the aisle.
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this minority in the house has come to think of compromise as a dirty word, and it appears as if they can't take yes for an answer. if you don't care about debt reduction, if you don't care about debt ceiling, rather, you can't get something done. now speaker boehner, who is a good and reasonable man, wants to do the right thing and compromise, but he's struggling to rein in his caucus. instead of leading the house, speaker boehner is being led by a fringe in his caucus that thinks default is okay. this week speaker boehner offered a two-step plan that simply kicks the can down the road. it resolves the debt ceiling only for the next few months. and with the new c.b.o. numbers, it will inevitably resolve it for even a shorter period of time. and that puts us within a few months right back here at square
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one all over again with the same anxiety, the same gridlock, the same problems we face today. what sense in the good lord's name does that make to just repeat this over and over and over again until we drive off the cliff? it makes no sense. now, madam president, all we have to do is just look at how difficult this crisis has been to resolve after a year of negotiations. does anyone, does anyone think it would be a good idea to do this all over again in less than six months? the speaker's approach is not only wrong, it's dangerous. it would leave a cloud of default hanging over our heads for the next several months undermining confidence in u.s. bonds. market analysts have rejected the speaker's approach, saying it could actually bring some of the same bad consequences as a
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default itself. it could even cause a credit rating downgrade. just yesterday the c.e.o. of nasdaq testified before the judiciary committee and said -- quote -- "the longer the deal, the better it is for the markets." christian cooper, a currency trader, was quoted by bloomberg news this morning saying -- quote -- "from the market's point of view, a two-stage plan is a nonstarter because we know now it is amateur hour on capitol hill, and we don't want to be painted into this corner again." there is a significant risk after downgrade with a deal that ties further cuts to another vote only a few months down the road." unquote. he said it better than any of us could say it, and he's a currency trader. and mohammed al ariad, the c.e.o. of peupl co, one of the most -- pimco one of the most respected investors in the markets and he investors
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hundreds of billions of dollars. mr. moliarian said the other night that -- quote -- "the political ground is being prepared for a short-term stopgap compromise." and he warned that this could push stocks down and leave the u.s. debt rating -- quote -- "extremely exposed to a damaging downgrade." let me again quote mr. aliarian, one of the great experts on our credit markets. what he said is the kind of plan that came over from the house, that is attempting to be debated in the house -- i don't think it will make it over. but the kind of plan being debated in the house would -- quote -- "create an extremely exposed damaging downgrade to our credit to, our nation's debt rating. even republicans rejected a short-term solution in the recent months.
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it doesn't give you certainty. ideally you'd like to get at that settled and mott have to continually -- have it continually hanging over you shall. that's the republican head of the ways and means wheat. house majority canter said, if we can't make the tough decisions now, why would we be making those tough decisions later? i don't see how multiple votes on a debt ceiling increase can help get us to where we want to go. it is my preference we do this thing one time. putting off tough decisions is not what people want in this town -- unquote. that's from majority leader cantor, and yet he's leading the charges to send over the very plan -- the very type of plan he's criticized only a few weeks ago. republicans have pearchtsly flip-flopped on this point. they're now saying they want the same kind of debt ceiling --
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short-term debt ceiling increase that they opposed an substantive grounds previously. so republicans have flip-flopped on this point, but moik make no mistake about it a short-term zeal still a nonstarter in the senate and nothing more than a glide path to a credit downgrade, and we will not allow it. while republicans continue pushing for on productive plan, senator reid's plan, the senate plan, offers real potential to finally break this impasse t makes difficult choices. it includes almost $1 trillion in domestic discretionary program cuts, including defense. this is sear just belt tightening that have have consequences, good consequences, for years to come. and the plan received a major boost this morning when congress's official scorekeeper confirmed that the first draft cuts more, a lot more, than the
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boehner plan. according to the congressional budget office, the senate draft bill achieves almost $1.3 trillion more in deficit reduction than the boehner plan. let me repeat that. according to c.b.o., the senate draft bill achieves almost $1.3 trillion more in deficit reduction than the boehner plan. the report also affirms that the senate's plan -- the senate plan's $1 trillion in savings from the iraq and afghanistan wars are real. that's c.b.o. saying it. not some democrat who's hoping and praying for an easy fix. this completely undercuts the arguments by republicans who have tried to call these savings a gimmick, even though they included them in their own budget and voted for them only a few months ago. if it was knock their budget -- if it was okay in their budget, it's got to be okay in our budget. you can't just change your mind
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based on whose budget it is. the substance should matter to some extent. plus, since the c.b.o. will only measure the plan's first draft before aofficial plan savings were incorporated into the bill, the final version will achieve even deeper savings when it is filed on the floor. as "politico" reports this morning, "in the battle of budget scores, the senate democratic deficit-reduction bill is the clear winner thus far over an alternative by speaker john boehner." and lastly, senator reid's proposal allows for a joint committee that has the potential to achieve even deeper savings down the road to get our country back on the path to economic growth. all in all, this is an offer that republicans can't refuse. all of the cuts in senator reid's proposal have been supported at one point or another by the republican side. and it meets the two main requirements laid out by the house republicans.
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first, speaker boehner said the amount of the debt ceiling increase must be matched by the amount of spending cuts. our proposal will do just that. second, speaker boehner said that the tax increases must be off the table. well, even though most of us would proofer tax increases -- would prefer tax increases, our proposal includes no revenue raiser whatsoever. we don't want tax increases on the middle class. we want tax increases on the wealthy and elimination of corporate loopholes. and to not have them is a hard decision for many on our side who know that we're going to need to do that for serious debt reduction. so, bottom line: in conclusion we're getting dangerously close to august 2. over and over, democrats have shown a willingness to move in the direction of republicans. it's time for speaker boehner to cut off his extreme republicans that refuse to support even the plan that he crafted to meet their reckless demands.
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the reid plan is our best route to a compromise, a compromise we need soon before the markets mas render a truly ominous result. mr. durbin: madam president, i want to thank my colleague from new york, senator shiewrnlings as well as senator mikulski from maryland for coming to the floor and speaking about the crisis that we faissments the debt ceiling default which will occur in six days if we do not act will have a profound, negative impact on america's standing in the world and our economy at home. it threatens to stifle job creation and to slow down the business growth that we need to get out of this recession. it is the most serious impact you can imagine at a time when we are facing this kind of recession. this debt ceil something being extended or should be extended under a law that was passed in
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1939 where we have extended the debt ceiling 89 different times -- 55 times under republican presidents, 34 times under democratic presidents -- and virltly evervirtually every pres done it. the president that holds the record for the most debt ceiling extensions in history is ronald reagan. ronald reagan extended the debt ceiling 18 times in his eight years. during that period of time, tripling the national debt. the nat president who holds the next record is president george w. bush, who doubled the national debt in his eight years and raised the debt ceiling nine times. this should have been done and done routinely. many of the members of congress, house and senate, who have come to the floor and said we will never vote to extend the debt ceiling i think are not being honest with the american people. the debt ceiling is paying for things these congressmen and senators voted for. they came to the floor and said, let's go to war. let's stay in war. let's spend $10 billion a month.
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and the president said, that was congress's decision. now i have to borrow the money to keep that promise. and these members of congress are saying, oh, no. we don't want to have any fingerprints on the debt ceiling extension. you can't have it both ways. members of congress cannot ask for spending and then fault the president when he has to borrow money to make it happen. that's exactly what they're doing. the president has tried to work out a bipartisan agreement to deal with this debt ceiling crisis. he invited in republicans and democratic leaders, with vice president biden, to sit down and work out an agreement, a bipartisan agreement. about four weeks ago the house republican majority leader eric cantor of virginia stood up and walked out. he said, i'm walking away from these bipartisan negotiations. i'm noting about to be party to them. leave it up to speaker boehner. speaker boehner then went into negotiations with president
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obama, talking behind the scenes about ways to resolve this. that was a positive thing. but then he announced, he was walk #-g away from negotiations -- not once but twice, most recently last friday. monday night, television sets around america are tuned in as the president of the united states explains this crisis and then speaker boehner explains his point of view. speaker boehner said monday night he had a plan, a plan that would solve this crisis in a responsible way. that was monday night. but then came tuesday, and as the dawn came on tuesday morning and people took a close look at boehner plan, here's what they found: they found that business leaders across america are saying it was a terrible idea. the idea after six-month extension to the debt ceiling and going through this mess again and again would harm our economy. and then the congressional budget office took a look at the boehner plan. they talked about monday night and they said it doesn't add up.
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it doesn't cut the spending that speaker boehner said it would. and then finally, 100 members of speaker boehner's republican caucus walked out on him yesterday saying it was a bad plan. so here we are. six days away from a deadline, six days away from a manufactured political crisis. it's time to do the right thing. senate majority leader harry reid has a proposal which addresses this responsibly. it cuts spending and it's already been scored, has it not, by the congressional budget office, and it turns out that unlike speaker boehner's plan, senate majority leader's harry reid's plan does in fact cut spending to move us towards a balanced situation. secondly, it extends this beyond the next election, beyond the next year so we don't put our fragile and weak economy through this again and again and again. that's a sensible thing. it also calls for the creation of a joint committee to deal
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with the long-term deficit. i've been involved in this conversation with the deficit commission, and again with the gang of six. we can do this on a bipartisan basis if we are honest and open with own another. and majority leader reid lead us in that dregs. so, madam president, we face a deadline six days from today. the boehner plan of monday night has disintergreated before our eyes. it has been rejected by business leaders. it has been rejected by the congressional budget office. it's been rejected by the house republican caucus. it is time for a little humility on both sides of the aisle from both parties. let's put all this squabbling aside. let's focus on america's economy, putting people to work, saving businesses, and handing our debt in a responsible way. we can do it. we can do it in we stop listening to the political extremists and start dealing with the center of america which calls for leadership and wants
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us to put an end to this squabbling. madam president, i yield the floor. the presiding officer: the majority leader. mr. reid: i have eight unanimous requests for committees to meet. these have been approved by both the majority and minority leaders. so i ask consent that these requests be disagreed to and be printed in the record. -- be agreed to and be printed in the record. the presiding officer: without objection. mr. reid: ask that the senate proceed to executive session to consider calendar number 194. the presiding officer: the clerk will report. the clerk: nomination, department of state. garry loc cevment of washington to be ambassador of the united states of america to the people's republic of china. reid scried that the nomination be can -- mr. reid: i ask that the nomination confirmed, the motion to reconsider be laid on the table, no further motions be in order. to the nomination, and that snaimentz related to the nomination be printed in the record, the president be immediately notified and the senate resume legislative session. the presiding officer: is there an objection? without objection.
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mr. mccain: madam president? the presiding officer: the senator from arizona. mr. mccain: i ask unanimous consent to speak as if in morning business with additional time, if necessary. the presiding officer: without objection. mr. mccain: madam president, as the senator from illinois just pointed out, today we are six days away from a possible default which could plunge this country into a serious crisis. in fact, there are some who view that maybe it is not exactly six days. it could be a few days more. there are those that argue somehow in a bizarre fashion that somehow we could prioritize our payments to the most urgent requirements, such as our veterans, such as social security. others -- i wonder if the greek government
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came up with that same proposal as they went into bankruptcy that they would prioritize spending that's remaining? but the point is -- the point is, today we are six days away. the point is the markets are jittery. investors are concerned, and, most importantly, our constituentconstituents -- our s are frustrated, they're confused, and they're angry. today on the front page of "usa today," there's a headline that says, "the debt: what americans think about the political debate." and it goes on to say, "just get it done. work it out." another person says, "i'm sick of it." says davis, 73, a retired economist. "they're playing games. here we're trying to pull ourselves out of recession and they can't come to an
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agreement." if anyone thinks that the reputation and the approval rating of congress and the presidency has improved because during this situation that we find ourselves in, then obviously they are out of touch with their constituents and the american people. not only are the american people concerned, not only are the american people upset, but i quote and ask to be made part of the record an article from this morning's paper, "the washington post" that says "frustrated executives say political impasse slows hiring and investing. business leaders are growing exasperated with washington and say the dysfunction within the political system is holding them back from hiring and investing."
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so where we are is average american citizens are worried. social security recipients are, are entitled, are calling our offices, and the markets are already jittery. there is most economists believe that if we allow this deadline to pass that we will see a cratering of the financial markets, which obviously has significant impact on savings, on people's holdings in the stock market, 401(k)s, et cetera. and meanwhile, meanwhile here we are with a situation that over on the other side of the capitol our republican friends are trying to come up with a proposal that will receive the support of their majority, and
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over here we have individuals who believe somehow that there is still a chance, at least in this congress, to pass a balanced budget amendment to the constitution. now, i will take back seat to none in my support of the balanced budget amendment to the constitution. 13 times i have voted for it. i will vote for it tomorrow. but what is really amazing about this is that some, some members are believing that we can pass a balanced budget amendment to the constitution in this body with its present representation, and that is foolish. that is worse than foolish. that is deceiving. many of our constituents, by telling them that just because the majority leader tabled the balanced budget amendment
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legislation, that somehow through amending and debate, we could somehow convince the majority on the other side of the aisle to go along with a balanced budget amendment of the constitution. that is not fair. that is not fair to the american people, to hold out and say we won't agree to raising the debt limit until we pass a balanced budget amendment to the constitution. it's unfair, it's bizarro. and maybe some people have only been in this body for six or seven months or so really believe that. others know better. others know better. i am confident, one, someday we will pass a balanced budget amendment to the constitution. i am confident that the overwhelming majority of the american people support it. three, i am convinced that that is the only way that at the end of the day we will get spending under control, because i have
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seen in the past congress enacting very strong restrictions on spending, such as the gramm-rudman legislation, which required spending cuts with increases in spending, and all of them failed because congresses cannot bind future congresses. and that's why i remain committed to a balanced budget amendment to the constitution. but to somehow think or tell our citizens that if we have enough debate and amendment here in the senate in the short term in the next six days that we will pass a balanced budget amendment to the constitution is unfair to our constituents. it's unfair to our constituents, frankly, to come up with a plan, so-called reid plan, that full of smoke and mirrors and, frankly, does not entail any increase, real spending cuts.
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it's unfair of the president of the united states to lead from behind. it's unfair of the president of the united states not to come forward with a specific plan that perhaps could be considered by both bodies, but only to go out and give lectures and act in as partisan a fashion as i have seen in his addresses to the american people. so no wonder, no wonder the american people's approval ratings of the president and of congress are literally at all-time lows. so i want to talk for just a second, for a minute about a editorial in the "wall street journal" this morning. the "wall street journal" is not known to be a, especially on its editorial page, a liberal periodical. it's entitled "the g.o.p.'s reality test."
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it talks about the debt limit is heading toward a culmination with president obama reduced to pleading to the public to support a tax increase and speaker john boehner and senate majority leader harry reid releasing competing plans that are the next to last realistic options. the question now is whether house republicans are going to help mr. boehner achieve significant progress or in the name of the unachievable hand mr. obama a victory. mr. obama recognizes these stakes, threatening yesterday to veto the boehner plan in a tactical move to block any democratic support." and it goes on and talks about, this editorial, about the two-phase boehner plan. congress would authorize a trade in new debt in return for $1.2 trillion. it has since been scored by the c.b.o., and now i believe that on the house side they are struggling, and i hope will succeed, in coming up with a
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proposal that will authorize the cuts that we have advertised. but i go on to read, "unless the plan passed, mr. obama couldn't request the additional $1.6 trillion debt ceiling increase that he would soon need. the political incentive is for a reasonable package, and many senate democrats also don't want to vote for tax increases before 2012." it talks about the critics, about people putting out statements, telling republicans, telling the speaker to come up with a better solution. usually sensible club for growth inherited action, the political arm of the heritaging foundation are scoring a point for the boehner plan. but what none of these critics have is an alternative strategy. none of these critics have an
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alternative strategy for achieving anything nearly as fiscally or politically beneficial as the boehner plan. the idea seems to be if the house g.o.p. refuses to raise the debt ceiling, a default crisis or gradual government shutdown will ensaourbgs and the -- will ensue and the public will turn en masse against barack obama. the republican house failed to raise the debt ceiling would somehow skate ball the claim. then democrats would have no choice but to pass a balanced budget amendment and reform entitlements, and the tea party hobbits could return to middle earth. this is the kind of crack political thinking that turn sharron angle and christine o'donnell into g.o.p. nominees. the reality is the debt limit will be raised one way or another. the only question now is how
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much fiscal reform and what political fallout. if the boehner plan fails in the house, the advantage shifts to mr. reid's senate plan which would raise the debt ceiling by $2.4 trillion in one swoop through 2012. that would come without a tax increase, but also $2.7 trillion in mostly fake spending cuts, like less government waste, fraud, and abuse. how many times have we heard that we're going to cut waste, fraud and abuse? and a $1 trillion savings from troop drawdowns in iraq and afghanistan that are already built into the baseline. as fiscal reform, this is worse than mr. boehner's plan. the speaker's made mistakes in his debt negotiations, not least in trusting that mr. obama wants serious fiscal reforms. but thanks to the president's overreaching on taxes, mr. boehner now has the g.o.p. position inside of a political and policy victory. if his plan or something close
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to it becomes law, democrats will have conceded more spending cuts than they thought possible and without getting the g.o.p. to raise taxes and without being able to blame republicans for a debt limit crackup or economic damage. if conservatives defeat the boehner plan they will not only undermine their house majority, they will go far to reelecting mr. obama and making entitlements that much harder to reform. let me say again i believe that the plan crafted by senator mcconnell that would call for significant cuts in spending, which would not have raises in taxes, would in the short term be the most reasonable solution. i hope that on both sides of the aisle we could work together and negotiate a way through that. but i also think the much dried by some -- derided by some idea of a committee composed of
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members of congress -- of members of congress only -- from both sides of the aisle, from both sides of the capitol to sit down and work out a long-term solution to our fiscal calamities that we are facing, and those results, and those recommendations by that committee be subject to an up-or-down vote only is the only way we can go. how many times have we had a budget resolution that tasked the various committees to come up with savings and always those savings are phony or they're dismantled on the floor of the senate? the only way that we are going to make the, have the courage to make these cuts is with a committee composed of equal number of republicans and democrats on both sides of the capitol who come up with tough, tough measures that need to be
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taken. i believe that the american people will support it. and if it is not an up-or-down vote, we know what happens around here. let's be honest, shr*ets some -- let's have some straight talk, the special interests prevail and they would dismantle the tough provisions this committee would come up with. and i say to my friends on this side of the aisle, this is a balanced, republican and democrat. we only control one-third of the government, and that's the house of representatives. so it seems to me a balanced, equal representation is to our advantage. i just want to say a word again about the reid plan. first of all, i congratulate the majority leader for coming up with a plan, because certainly the president hasn't.
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spectrum auction is part of it. that's going to provide billions of dollars. i've been in this body for a considerable period of time. i can't tell you the number of times we have called for auctions of spectrum. it's an annual basis, a copout that prevents us from making tough decisions. most egregiously, the majority leader's plan provides $1 billion to pay television broadcasters who return unused television broadcast spectrum. a television broadcaster got the spectrum for free. now we're supposed to ask the taxpayers to give them $1 billion to give back the spectrum that they owe that, they own. and then a -- very interestingly savings in freddy mac and fannie mae. $30 billion in freddie mac and fannie mae reforms. i would point out we've already
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spent $150 billion on fannie mae and freddie mac that we have never seen the end of. and then of course the large claim that there's $1 trillion in savings from winding down the wars in iraq and afghanistan, and of course that is phony. everybody knows that we are winding down the war in afghanistan and iraq. so, here we are six days away, six days waerbgs and we -- six days away, and we still have members of congress saying we have to pass a balanced budget amendment to the constitution. we have members on the other side who are saying that we have to raise taxes. we have a president of the united states who so far has refused to come forward with a detailed plan of his own. that's called leading from behind. it's time, it's time we listened
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to the markets. it's time we listened to our constituents. but most of all, it's time we listened to the american people and sit down and seriously negotiate something before we face a situation where we are depriving the american people of the fundamental right of having a government that doesn't deprive them the essential services, goods and entitlements which they have earned. madam president, i yield the floor. i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:
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mr. corker: i'd ask unanimous consent to vitiate the quorum call. the presiding officer: without objection. cork coirkd objection. mr. corker: madam president, i'm here today with a sense of optimism. i know that all of us are very concerned about what's happening in our country, the debt ceiling. i know we're getting lots of calls from constituents. but i want to say that i think we've made remarkable progress over the last couple of weeks. i mean, if you think about just a couple weeks ago, people were crafting legislation for sort after a political vote, if you will, and i understand that. but here we are today. we actually have the leader of the united states senate, a democrat, who has proposed a bill that has to do with spending. the republican leader of the house has introduced a bill that
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has to do with spending. and, candidly, i'm kind of uplifted. we're finally on the right topic now, and you know, candidly, to use it a cloa colloquial term fm tennessee, we're learning to cook with gas. people are focused on the right issue. so, madam president, i want to say that, look, we've all talked about this august 2 date. we've talked about the fact that, you know, our debt ceiling has to be raised by thefnlt and certainly there are a lost ambiguities in the financial markets right now. a lot have been watching the treasury department and think the treasury department has actually made some ways of causing that to last a little bit longer. but i think one thing we can all agree to in this body at present, we do have until august 2. i think everybody would agree that -- some people think we have longer. i think the one thing that almost everyone would agree with
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in this body that we have until august 2 to solve this problem, and i hope we'll do so. the other thing, madam president, that's becoming part of sort of the, i think, the mantra and the understanding throughout our country is that we -- many of the financial markets, the people that actually buy our treasury as, they're now not as concerned about the debt ceiling -- they want it raised; don't get me wrong. we all understand that august 2 is the date that we have until to do that. but now they're more concerned about the fact that we may raise the debt ceiling and not actually do those things that we need to do to actually get our deficits in order. and many of them -- first of all we have the rating agencies that are saying if we don't get at least $4 trillion in savings in some form or fashion, then some of they wil them are going to de
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us. i'm on the banking committee. our folks are constantly talking with folks who buy treasuries much the actual purchasers of these treasuries are now telling us and our office that if we don't do something that at least shows $4 trillion in savings, then they believe we're -- we don't have the political will to do those things to cause our country to be as worthy of a borrower and that we're going to be paying more in the way of rates. so the second point i'd like to makers madam president, is we have a proposal on the floor. i personally -- and i may catch some grief back home for saying this, but i think senator reid has actually tried to put something forth to help solve this problem. i think he's been working closely with senator mcconnell on that. i think senator boehner -- i know he has a different set of circumstances -- is trying to solve this problem. but here's the point:
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we're at a point place where we're now actually talking about the right top tyke and we now know if we don't put forth a solution that is at least $4 trillion in the order of magnitude that we're going to be downgraded. it seems to me that people that on the other side of the aisle, my democrat friends would not want to support a proposal that extends the debt ceiling that is less than $4 trillion because their president would be presiding over a country that was downgraded while he was president. and it seems to me that republicans who have worked hard to press this issue -- and everybody has gone through tremendous acrimony and certainly people who are watching this are incredibly frustrated and angry -- it seems to me that republicans who are on the verge of potentially being able to craft something that actually solves this problem would not either want to
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support something that's less than $4 trillion. as a matter of fact, i would make this staivment i think it's true. anybody that votes for a package in this body to address the debt ceiling and our deficit simultaneously that isn't of the order of magnitude that's real and scorable -- those are two different definitions, real and scorable -- is actually voting for a package that likely causes our country to be downgraded. so here's what i would say. we got senator reid who's offered a proposal. they've scored it, i think, at, like $800 billion. i know it skas $3 trillion. senator boehner has offered a package and he, too, has had some scoring issues with his package. it seems to me that all of us in this body should be pressing the leaders on both sides of the aisle to at least present a scorable package that's scorable
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and real in the area of $4 trillion - or -- depending on wt you decided to do in that package -- if you voted t for a package that was less than that you'd be casting a vote to raise the debt ceiling but at the same time probably cast our country into a situation where we're downgraded. and that doesn't make any sense toto me. so, madam president, we have six days left. i know that people back home are nervous. i did a teletown last night. we had thousands of people on the call. people are angry that we've waited this long to get serious about this issue. they're concerned about social security checks, disability checks, veterans checks. i understand that. i empathize with them. but we haven't quite finished our work. and we actually are on the right topic finally. and again, senator reid has offered a proposal. the house has offered a proposal. neither one of them are strong
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enough. and, madam president, for what it's worth -- i know you know this -- but i'm talking to people on both sides of the aisle. and people i think are reading what the markets are doing and becoming increasingly concerned about considering voting for a package. i know the presiding officer comes from the center of the university auniverse as it relae issues. people are rising up. there are a lot of private phone calls that are taking place. people are saying, wait a second. let's think about this. the markets -- which matter by the way -- are now saying to us, they know we're going to deal with the debt ceiling and i know we are -- they know we're going to deal with the debt ceilin cey the time we have to. but now they think we're not going to do something that's actually the real solution. so i'm here today to talking to my friends on both sides of the tile say, let's communicate with our leadership and say we've got six days left. we've got an opportunity to do
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something -- we've all been saying this -- that really does rise to the seminal moment that we actually solve this problem. this is not a republican issue, it is not a democratic issue. it is something that is going to affect everybody in our cufnlt and we're finally, after all of this time, focused on the right subject matter. i mean, we really are. and so i just met with a group of senators. i'm going to meet with another group of senators in a little while. let's make sure that our leadership -- and let's make sure on both size size sides ofs capitol -- understand that we believe that voting for a package that is less than $4 trillion in savings over this next decade -- that's real and scorable -- really isn't getting the job done. now, madam president, i would assume that -- i know that senator reid's approach has been to do it all at once. maybe there is a way to craft a package between nods and next tuesday that people are vote on
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that has $4 trillion in real savings. i think that might be difficult, but maybe something is happening behind closed doors that we're not aware of. i think it's -- i know that on the other side of the building people are concerned about -- well, actually on the other side of the building they're looking for a short-term stefntle and i know the president has been concerned candidly about a short-term extension. in fairness, i think the business community around our country would be concerned about a long short-term extension. in other words, one that carries out months and months and months and we still don't have a solution to this problem. i understand that creates the kind of uncertainty that many of the people on my side of the aisle and candidly people on the other side of the aisle to some degree have talked about as it relates to the business environment. so, madam president, sure, i'd love to vote for something that solved this problem and does it all in the front end.
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but i assume that our leadersh leadership, knowing the acrimony that's taking place -- but at least we're on the right subject matter finally -- the acrimony that's taking place, u.a.e.ssume that theu.a.e. dishassume that e really, really short-term snengs their back pocket. that to the extent we don't come to this conclusion by next tuesday, they're trod pull out and they know that it's something that can actually pass both bodies. madam president, again, i think we're so close now because we're finally focused on the right thing. i think we're close it getting to something that solves our country's problems for a while, causes people around the world and the country to know that we're actuallying with willing -- have the will and have the courage to deal with these issues and at the same time
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addresses the debt ceiling. should we not quite get there, should we not quite gleet by thi--should we not quite get thy this tuesday and we've two groups of people, i would assume that you are a leadership -- they understand what's at stake here -- has in their back pockets a very short-term extension that can be used as a bridge to the kind of solution that maybe takes us to a place that we can all agree helps solve our country's problems. madam president, i've heard people have been coming down to the floor back and forth and criticizing each side of the aisle. i'm actually more optimistic today -- i'm not over the top. but i'm more hopeful than i was two weeks ago when we weren't even focused on the right issues, at that time focused on casting blame, and now what we have is both bodies looking at packages to actually address the deficit that we have before us.
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madam president, i hope that people on both sides of the aisle will talk to leadership, will let them know that they have no desire to support something that doesn't solve the problem with all that we've gone through as a country and as a body over the course of the last couple of months. and i'm hopeful that we'll figure out a solution that actually meets that test -- in other words, avoids the crisis on tuesday -- and at the same time avoids the crisis that will occur if people look at our country as a downgraded entity because we haven't shown that we're willing to at least deal with $4 trillion. you know, i think most people know i'd like to do a lot more than that, and i offered a bill that was bipartisan that did a lot more than that. but i think we all now know that baked in, baked into the expectations about where our
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country is today is the fact that it's got to be a minimum of $4 trillion. and i think a lot of people have worked towards that goal. to even set up a process that's short of that doesn't make any sense to me. it's kind of like you've got to be kidding me. we've got to go through the aggravation of the next six months working towards an aspirational goal that we all know doesn't solve the credit rating issue. so with that, madam president, i thank you for the time. i yield the floor. i hope that we come to a successful conclusion soon. i stand ready and am talking with people on both sides of the aisle to try to come up with a solution so that we either solve this on the front end or put in place a process, a very quick process that takes us to a place that we know we've actually dealt with the problem. with that, i yield the floor.
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madam president, i notice the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:
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mr. franken: madam president. the presiding officer: the senator from minnesota. mr. franken: madam president, i would ask that the quorum call be vitiated. the presiding officer: without objection. mr. franken: thank you, madam president. i rise today to discuss the urgent need to raise the debt limit. i'd like to take this opportunity to remind my colleagues of our obligation to
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represent our constituents' best interests and those of our great nation, for at this late hour with the deadline for an agreement fast approaching, the consequences of inaction are clear. they have been made clear by economists, they have been made clear by credit rating agencies, they have been made clear by the federal reserve and by our treasury secretary, and they have been made clear by respected leaders on each side of the aisle. and soon if we do not act, they will be made clear by the market itself. i keep hearing from some members talk about the august 2 deadline as if it's no big deal. they say they have their own theories about when the real deadline is. that just leaves me dumfounded. i for one am going to take the
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treasury secretary and virtually every economist at their word. we need a solution before august august 2 or we risk economic catastrophe. there are some members who are essentially saying that the treasury can prioritize payments to avoid default, that getting social security checks out shouldn't be a problem. i heard a republican member of the house budget committee on public radio this past weekend say that the money for social security checks is in the trust fund. well, yes, we have $2.6 trillion in assets in the trust fund, but they are all in treasury securities, not cash. i find it just stunning that a member of congress, let alone a member of the budget committee, would not understand the most basic functioning of our
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government. now, if there is no debt limit increase, treasury may be able to juggle payments to get social security checks out on august 3, and i'm sure they will do everything they can to do so, but august 3 would be just day one of treasury's improvised prioritization strategy. august 3 is the date that about half of the social security checks go out, but we have another round scheduled to go out on august 10. and another on august 17 and another on august 24. in fact, the treasury sends out over 70 million checks a month. august 3 is not the end of the problem. it is the beginning. about a month ago, the bipartisan policy center briefed members of the house republican
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caucus on the actual implications of the august 2 deadline, what we could pay or what we couldn't pay. j. powell, the former under secretary of treasury under president george h.w. bush presented at the briefing. he outlined his research on what is likely to happen on august 3. he suggests that in the month of august, we could pay our debt interest, social security checks , medicare and medicaid, vendors for defense projects and unemployment insurance benefits. that's what we could pay. but no pay for active duty military, no benefits for veterans, no federal loans for
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low-income students about to head off to college in the fall, no pell grants, no federal government employees including counterterrorism agents in the f.b.i., for example, no border agents. now, before we default, we could have time to make this sign for all points of entry. that's just the tip of the iceberg. that's just a sample of things we definitely couldn't afford to do. you can take that -- take that down. that doesn't even address the global economic impacts of playing so close to the edge. the dollar would be devalued.
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our credit rating would be downgraded. it would cost us much more, much more to borrow and to pay the interest on our debt, and thus our debt would actually increase. more importantly, all adjustable interest rates would rise including on credit cards and mortgages and student loans. new loans, of course, would be more expensive, and these impacts could have a legacy that dogs us for decades, if not centuries. this is serious business and we shouldn't be testing this deadline. yet, that's exactly what some of my colleagues are doing. i worry that republicans in the house are blind to research, deaf to reason and are simply
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ignoring facts that are contrary to what they want to hear. throughout this debate, conservative house republicans have stood in the way of a deal and we have offered them some pretty sweet deals and they have walked away. they have treated the august 2 deadline as an advisory, as optional. they suggest that the treasury could figure something out to prevent a default. now they are opposing senator reid's sensible deficit reduction plan because of how it calculates some of its savings, specifically at issue is the reid plan's $1 trillion in savings from winding down the wars in iraq and afghanistan which republicans are calling a budgetary gimmick, not real savings, yet the ryan budget, which almost every house and
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senate republican voted for, counted the same cuts almost identically. so they say it's real savings in the ryan plan but fake savings in the reid proposal. i'm sorry, but you just -- you can't have it both ways. further, senator reid's plan is actually -- is all cuts. i don't necessarily like that. it contains dollar-for-dollar spending cuts to match the debt ceiling increase, and as much as i don't like this aspect of it, it doesn't include any revenues, even though a "washington post"/abc news poll says that 72% of the american public believes we should ask those making over $250,000 to pay more. 72%.
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but a cuts-only plan is what republicans have been saying they want all along, and now we have given it to them. we have it out there, it's there. and all of the cuts in the reid plan have been supported by republicans in the past. so we are presenting a plan that is all cuts, no revenue, and the pretense that they are using to reject it just doesn't pass the smell test. and according to c.b.o., it saves $1.3 trillion more in savings than the boehner plan, such as it is. you know, i often hear republicans say the corporations are sitting on trillions of dollars of cash instead of
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investing, expanding and creating jobs because businesses are facing so much uncertainty. well, senator reid's plan offers certainty, but suddenly republicans want a short-term deal, one that would very well put us in this same crisis again in six months. what kind of certainty is that? now, a short-term deal will not offer our businesses and markets the certainty that they need, and a short-term deal may very well induce a credit downgrade, according to standard and poor's yet, republicans say they prefer a short-term deal over senator reid's plan, which would take us through the end of next year. i don't get it.
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it just sounds to me like they care more about politics and winning than they do about their constituents' well-being. about the prosperity and economic security of the nation. their hard-line and cavalier attitude is frankly dangerous, very, very dangerous. playing fast and loose with the facts is reckless. the american people deserve better than this. we need to raise the debt ceiling now, and leader reid has shown us the way forward. i don't like all the cuts in his package and i wish there were increases in revenue from those who can afford it, but i know we
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have to pass it because it will keep us from defaulting, and it will do so responsibly and sensibly. we owe it to the american people to pull back from the brink and pass the reid plan so we can avert disaster. we owe it to our constituents and we owe it to our children. madam president, i yield the floor. i would note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:
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mr. baucus: mr. president? the presiding officer: the senator from montana. mr. baucus: mr. president, i ask that further proceedings under the quorum call be dispensed with. the presiding fi

U.S. Senate
CSPAN July 27, 2011 9:00am-12:00pm EDT


TOPIC FREQUENCY Boehner 40, Us 33, America 24, Washington 18, Reid 13, United States 9, Madam 7, Mr. Gruenberg 7, Mr. Reid 7, U.s. 6, Maryland 6, Afghanistan 5, Iraq 4, Cap 4, Harry Reid 4, Occ 3, New York 3, Europe 3, Kansas 3, Mr. Boehner 3
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